It’s the time of year when minds turn to the contents of the next operating framework – currently scheduled for publication on 24 November.
If the backroom briefings hold true, the Department of Health’s line is that providers will continue to have a 4 per cent “efficiency challenge” in 2012-13. It’s just like the 4 per cent challenge in 2011-12, which Monitor helpfully translated into a potential (and if you read the small print, more likely) “downside” of 6.5 per cent.
That “efficiency challenge” looks set to be made up of something like a further overall cash cut in tariff-based prices of 1.5 per cent, with the difference being whatever the Treasury’s number is for GDP inflation; currently 2.5 per cent for 2012-13, and less than half the rate of the UK’s now record-level RPI and CPI measures of inflation.
So, more pain for providers; not much change there then.
It will be a similarly familiar story for primary care trust clusters, who will again find their “real terms” increases translate into GDP inflation plus as little as the Treasury can get away with (2.6 per cent, perhaps).
For the real excitement, my money is on the shadow clinical commissioning group allocations, which will be made shortly after. The mood music is that allocations will be made on the basis of past year expenditure: effectively rewarding overspenders and abandoning the allocation formula which attempts to factor in variations of need. There are some good pragmatic reasons for doing that; not least that the allocation formula is squiffy on populations smaller than 100,000.
And advocates of the current formula might at least console themselves that, in so far as recent expenditure levels are mediated – if not wholly determined – by the needs weighted allocation formula, faint echoes of it will remain.
Not so for the “running cost” allowance. The plan is that the £25 per head of population allowance (£1.3bn nationally) will be made on raw – that is real – heads. The big losers in that scenario will be deprived areas such as Liverpool, Blackpool and Knowsley, where needs-weighted headcounts are over 25 per cent higher. Winners are the other end of the country: Berkshire West, Kingston and Richmond and Twickenham, where the formula shrinks raw head counts by as much as 20 per cent.
Presumably the decision has been made on the assumption that it is patients – not statistical entities – that cost money to administrate. But with more “weighty” populations tending to have higher co-morbidities and challenges, that’s an assumption losers may well challenge.
Sally Gainsbury is a news reporter for the Financial Times.